Fixing Social Security: Traditional Approachdes Vs. Something Radically Different - Reuters
The 2024 Social Security Trustees Report, despite the euphoria rampant in the minds of many pundits, simply continued what has been known for decades–the system is in serious trouble. And as we’ve been trumpeting on this site for the past few years, the longer Congress treads water on a long-term solution, the harder it will be to adopt remedies that would smoothly balance the books for the required 75-year projection period.
This general theme is picked up in a post by Reuters columnist Mark Miller, who quotes Mercatus Center at George Mason University Senior Research Strategist Charles Blahous on the potential for a solution differing substantially from the traditional approaches of either tax increases or benefit cuts, or a combination of both. With the possibility of further gridlock on the solvency issue–after all, the program Trustees have been sounding the alarm for decades–Blahous suggests “… barring a political miracle and a lot of leadership, I now think we’re headed toward a general revenue bailout.”
Absorbing the benefit shortfall into the federal budget would be a major departure from Social Security’s self-funded design, and would affect its self-sustaining characterization. Social Security has, since its creation, steered clear of a relationship to the national debt (although many unfortunately and incorrectly tend to equate the Social Security payout as a contributor to the nation’s budget deficits). As Miller’s post points out, the likelihood of this radical approach appears remote, as does the likelihood that suspension of full benefit payments will happen as projected.
In any event, the calendar continues to unfold toward full depletion of Social Security’s accumulated $2.8 trillion reserves, and action in the 118th Congress appears to be only a remote possibility at this point. We’re hopeful that the 119th Congress will take a proactive stance on new legislation to resolve the long-term funding problems facing this venerable senior benefit program.
Read Mark Miller’s reuters.com post here.